LANSING, Mich. — In just a few days, a 24% wholesale tax on marijuana will go into effect in Michigan. The Michigan Cannabis Industry Association (MiCIA) is asking for a court to stop the tax from going into effect.

The MiCIA filed a lawsuit challenging the wholesale tax that was passed with the state’s budget in November. The wholesale tax, known as the Comprehensive Road Funding Tax Act (CRFTA), is estimated to generate more than $400 million in revenue to help rebuild Michigan roads.

On Dec. 8, a Michigan Court of Claims ruled against the MiCIA. Court of Claims Judge Sima G. Patel denied the plaintiff’s motions for a preliminary injunction, allowing the wholesale tax to go into effect on its original effective date of Jan. 1, 2026. In his opinion, Judge Patel also found the CRFTA to be consistent with the Michigan Regulation and Taxation of Marihuana Act (MRTMA), which defines how marijuana can be taxed in the state.

Now, the MiCIA announced they are appealing that decision, asking for the Michigan Court of Appeals to take up the case immediately and to rule as soon as possible.

“We stand by our belief that the Court of Claims did not make the right call when it issued an opinion that declined to block the Michigan Legislature’s unconstitutional 24% wholesale tax on cannabis from going into effect on New Year’s Day,” said Rose Tantraphol, MiCIA spokesperson. “Our filing requests that the Court of Appeals take up our lawsuit, which we continue to believe is an exceptionally strong case on the merits. The 24% wholesale tax violates the will of the voters who approved the 2018 citizen ballot initiative on cannabis, and we will not back down from fighting for the will of the people in court.” 

The appeal by the MiCIA argues that the trial court was wrong when ruling against two of its arguments, and was incorrect in not ruling on the third issue.

Tantraphol said that the Court of Appeals needs to expedite the appeal to avoid harming the marijuana industry from the “unconstitutional wholesale tax”.

“The stakes are incredibly high,” Tantraphol said. “The Michigan cannabis industry has been an economic engine for our state since voters legalized marijuana in 2018. Our industry has created 47,000 new jobs, pumped $331 million annually to schools, roads, and other public priorities through the 10% excise tax we collect, and generated $188 million in annual sales taxes. This unconstitutional move by the Legislature jeopardizes all of that.” 

The 24% wholesale tax has not gone into effect yet, but some have argued that the tax would drive up prices and increase illicit sales of cannabis in the state. And just this week, C3 Industries announced its closing its Webberville plant and laying off 62 workers due to the wholesale tax.

“Businesses will close and neighbors will lose jobs,” Tantraphol said. “Cannabis businesses operate on thin margins, so allowing the 24% wholesale tax to go into effect will mean a lower volume of sales. The state’s own Senate Fiscal Agency predicts that due to market elasticity, total sales will decrease by about 14%.”

For the first time in the industry’s history, yearly revenue of recreational marijuana in Michigan is expected to be lower than the year previous.